The Delhi High Court recently observed that the grounds of ‘economic interests of India’ and ‘larger public interest’ cannot be invoked to issue look out circulars (LOCs) based on conjectures [Puja Chadha v Directorate of Enforcement].
Justice Sachin Datta said that even though the 2021 office memorandum of Ministry of Home Affairs carves out these exceptions, they cannot be invoked loosely and their application must be circumscribed by reasonableness and supported by cogent material.
“Although Clause (L) of the 2021 Memorandum carves out an exception permitting issuance of an LOC, inter alia, on grounds relating to the “economic interests of India” and “larger public interest”, it has been held that such an exception cannot be invoked loosely or on the basis of conjecture. While the expressions employed are of wide amplitude, their application must be circumscribed by reasonableness and supported by cogent material,” the Court said.
Pertinently, the High Court also said that mere familial association with an accused does not justify issuing an LOC.
The Bench made these observations while quashing the LOC issued against Puja Chadha at the instance of the Enforcement Directorate (ED). Chadha is a British citizen of Indian origin.
She had travelled to India on March 23 this year to visit her mother. On arrival at Delhi’s Indira Gandhi International Airport, she was detained overnight, her documents were seized, and she was informed that an LOC had been issued against her in connection with investigations involving her estranged uncle, businessman Sanjay Bhandari.
The ED had registered a case against Bhandari in 2017 under the Black Money Act and later under the Prevention of Money Laundering Act (PMLA).
Chadha’s counsel told the Court that though her husband was named in a 2023 supplementary prosecution complaint, she was never made an accused in any complaint or proceeding.
Meanwhile, the ED argued that she handled Bhandari’s financial transactions in the UK and that her cooperation was necessary to complete the investigation.
After considering the case, the High Court said that merely because the concerned person is a relative of an accused does not justify issuing an LOC.
The Court also noted that her detention violated guidelines governing such circulars. It also emphasised that her visa had expired making her continued restraint untenable.
In light of the above, Justice Datta ordered that Chadha be permitted to travel to the UK after filing an undertaking to cooperate with the investigation. He warned that any violation of the undertaking would invite contempt of court proceedings.
Puja Chadha was represented by Senior Advocate Amit Sibal along with advocates Ankit Bhatia, Vinay Tripathi, Rajat Bector and Smriti Nair.
Special Counsel Zoheb Hossain assisted by Vivek Gurnani, Panel Counsel, Kartik Sabharwal, Pranjal Tripathi and SK Raqeeb represented the ED.
[Read Order]